Moving your savings or everyday banking to an online bank is a smart move, but only if you pick one with the right features. Not all online banks are equal, and not all offer the same features.
If you want the convenience, flexibility, and savings that come with online banking, there are certain traits you should look for. Here are some of them:
Insurance and Security
Safety always comes first. The most important box to tick when evaluating an online bank is safety. Good online banks, like SoFi, will be insured by the Federal Deposit Insurance Corporation (FDIC). It ensures that deposits up to $250,000 per depositor are protected if the bank fails.
Besides deposit insurance, look for modern security measures such as data encryption, multi-factor authentication, biometric login, and real-time fraud detection or alerts. These features help keep your finances safe even when banking remotely.
Interest Rates and Fees
One of the biggest advantages of online banks is their ability to offer far higher savings yields than traditional banks. Because they don’t maintain physical branches, online banks save on overhead and pass those savings to customers via better interest rates.
The best online banks offer an Annual Percentage Yield (APY) with a consistently good rate, zero monthly maintenance fees, and no minimum balance requirements. Higher APY with no fees increases your savings potential over time.
Easy Access
Even though online banks don’t have branches, many offer strong access to cash and everyday banking tools. Some online banks partner with nationwide ATM networks and reimburse out-of-network withdrawals.
Make sure the account includes a debit card that works for in-store purchases, online shopping, and ATM withdrawals. Other features to keep an eye on are remote check deposits, instant transfers, bill pay, e-statements, and mobile alerts or notifications.
Smart Money Tools
An online bank should do more than just hold your money. They help you manage it. Look for banks that offer savings buckets, which let you divide money into separate goals without juggling multiple banks.
Budgeting and spending tracking tools matter, too. Prioritize built-in tools that categorize expenses, alert you to unusual activity, or remind you of low balances. These tools help you stay organized, plan for goals, and make banking part of a smarter financial routine.
Reliable Customer Support
Banking online means you won’t walk into a branch for help. So, good customer service becomes essential. Online banks should offer 24/7 support via phone, chat, and email, fast issue resolution, and clear communication with transparency about policies, fees, and account rules.
When you’re dealing with money, access to responsive and quick support is key. It gives you peace of mind, especially if something goes wrong.
Transparency and Terms
Before committing to a bank, make sure the terms are easy to read and fair. They should clearly disclose their fees, APY tiers, minimum balances, and withdrawal limits. Check if they have hidden fees, especially overdraft, inactivity, or excessive withdrawal charges.
Straightforward user agreements are also better than long legal documents full of unclear jargon.
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